Getting Fired vs Getting Laid Off

Getting Fired vs Getting Laid Off

Updated 30 December 2020

Written by Lauren Jobling

Whether you have been laid off, terminated or fired – in the end, they all result in the same thing: a loss of a job.

There are many reasons why someone can be laid off or fired; this article will explore the key differences and what to do if you are faced with either.

What Does Getting Laid Off Mean?

If you have been laid off, your employer has had to make cuts in the workforce. This could be because of a few factors:

  • The company could be going into administration
  • There might not be a need for the role anymore
  • They are simply making budget cuts
  • They are merging with another business
  • The company is reducing its workforce due to business changes
  • Economic crises, like recession, could force a business to cut costs
  • A loss of a specific client/business which might result in your job title becoming redundant

For example:

You have been hired to account manage a big technology company; however, after a year, the tech company has decided to go in a different direction. This could mean your role no longer exists.

If you have been working at the company for a long time, you might be offered a package or some form of compensation for having to be laid off. This all depends on your contract and the actions the company has put into place.

How Does Being Laid Off Affect You and Future Employment?

Being laid off is not a personal attack on your abilities or an indication that you have done something wrong, so this should not affect you getting a job in the future.

It is quite common in the workplace and you will find many people have been laid off at least one time in their career.

Hiring managers are usually quite sympathetic about new hires being laid off in their previous employment.

When you are at an interview and the hiring manager asks why you left your previous role, it is imperative you tell the truth and advise the interviewer that you were laid off.

You could say something like this:

During my last role, I was sadly laid off due to a restructuring of the business. I was incredibly happy there and learned a lot – I appreciated the experience, but now I am looking forward to new challenges.

The Financial Implications of Being Laid Off

In most cases, you will be awarded a severance package if you are laid off.

The amount you receive will more than likely depend on your length of service, job title and salary.

Some companies may provide a monthly salary based on the years you have worked.

If you have worked at a company for 15 years, the company might award you 15 months' worth of salary. However, if you have been at a company for under a year, by law, you might not be entitled to anything and any severance given will be at the discretion of your employer.

Here is how it might work:

  • A severance package might be listed on your contract at the start of your employment and the company will have to honor it if they let you go.
  • You could also receive a severance package if the employer wants to keep relationships with staff on good terms and ensure legal proceedings do not take place.
  • Employers might already have a contingency plan in place if they need to let members of staff go, thus providing the employee with assistance whilst they look for work.
  • A business may continue healthcare, dental and other benefit packages until the worker lands a new role.

If the company is having financial difficulties and a financial severance package is out of the question, then you might find that perks will continue instead. However, if for some reason this cannot be offered, then you might have to seek unemployment benefits – this can differ from state to state.

What Does Being Fired Mean?

Being fired could mean that the skill set of the employee does not match the necessary standards of the company and needs to be addressed.

If you have been fired from your position, the reasons could be specific to you and how you have performed within the role you have been hired for.

The job you have still exists and will need to be filled in some capacity, which your employer will take into consideration.

The employer will have to go through several motions before they fire a member of staff, see the examples below:

  • The company might have to provide the staff member with a few warnings before their job is in jeopardy
  • Employers should offer sufficient training to employees if they feel they have not fulfilled the role appropriately up to this point
  • Several meetings with the employee will need to take place to see if there is any improvement in performance over time

Another reason an employee can be fired is that they might have breached some form of contract, data protection or violated one of the terms and conditions of employment. There may have been an incident where an employer believes a worker behaved inappropriately.

In some cases, an employer can terminate a contract for no reason at all; however, if an employee is let go without cause, this can then lead to unfair dismissal cases.

If you are not sure whether you have been laid off or fired you will need to discuss this with your boss and the HR department so all bases are covered and you know where you stand legally.

Your employer should make the next steps as clear as possible and will need to advise you of the following:

  • Why they have decided to fire you
  • Whether they will be offering any form of compensation, and if any bonuses/commissions earned will be paid
  • What notice period they are providing. Will you need to leave instantly, or does the company need to give notice by law?

If you have recently been put on a performance plan or have had regular meetings with your team leader and HR, your firing might not come as a complete shock.

If this is the case, it might be worth thinking carefully about why the position did not work out for you. Did you receive sufficient training? Did your leaders support you enough?

Taking these factors into consideration will help you when looking for future employment.

You might need to do the following if you have been fired:

  • Discuss the reasons for dismissal thoroughly with your employer to see where you can improve and if they are willing to provide a reference.
  • Request an exit interview – some companies do not offer exit interviews, but it is a good way to get closure.
  • Seek legal advice if you feel you have been fired unfairly and have identified several reasons why you were not at fault.
  • Claim unemployment benefits – If you have not been given any notice and you need financial support, you might have to claim unemployment benefits whilst you are looking for another job. This can differ from state to state, so seek advice before you apply.

How Will Being Fired Affect You and Your Future Employment?

A big difference between being fired and being laid off is the personal aspect of the situation and how it might affect you when looking for another job.

As mentioned above, most hiring managers are sympathetic regarding employees who have been laid off as it is out of their control and not due to performance.

However, being fired is a different story.

The hiring manager will want to know why you were fired and what you could have done to prevent it; they will want to ensure that you have learnt from the experience and it will not be a problem in your new role.

Here is an example of what you can say:

Although I savored my experience at my last job, I was sadly fired due to the role not being right for my skill set. The parting of ways was amicable and I learned a lot from the experience. It helped me focus on what I would like to do in the future, given the chance.

Or, if you have been fired due to personal or behavioral issues, you should be honest and mention this during the interview, for example:

I was sadly fired from my previous position due to personal issues I was having which led to inappropriate behavior. I was reprimanded and I sought help for my problems which are now resolved. I would love the opportunity to move on from my mistakes and grow in a new position.

So, if you have been fired and are interviewing for a new job, think of the following points:

  • Be honest with the hiring manager, explain the situation and why it did not work for you at your previous job. Never place blame on your previous employer, try and stick to the facts when talking about the situation.
  • Advise ways in which you have learned from the experience. Has being fired given you the motivation to do better in the future? How can you demonstrate the changes you have made?
  • Will you be seeking additional training to improve your skill set? This could be outside of work as part of a self-improvement plan, or you may be interviewing for a lower position role so you can benefit from more training and guidance.

You might find it more difficult to gain future employment if you have been fired. Hiring managers might be warier of hiring you unless you can demonstrate that you have grown from the experience and are aware of your strengths and weaknesses.

If you have left on good terms and in agreement that the role was not right for both parties, your previous employer might be happy to provide a reference.

Getting Fired vs Getting Laid OffGetting Fired vs Getting Laid Off

Do You Get Severance If You Have Been Fired?

If you have been fired because the role was not right for your abilities but you impressed your employer with your work ethic, you might be offered a severance package as a good-will gesture and a thank you for your work up until this point.

This will depend on the company and will be at their discretion.

However, if you have been fired due to misconduct or inappropriate behavior, you will not be owed any form of pay-out from the company.

Some businesses might continue to provide perks and benefits to staff members and offer severance if the employee has been fired due to lack of training, follow up from the company or any instance where the business could have provided more support. This would help prevent an unfair dismissal case.

How to Prepare for Being Laid Off or Fired

Another big difference between getting laid off vs getting fired is the time you must be given to prepare for it.

If you have been laid off, it is normal protocol for the company to provide their employees with at least 30-days notice, or a period specified in the contract.

This can be dependent on the role and whether the business needs you to tie up any loose ends and how long that will take.

If you have not signed a non-compete agreement and you do not have any further work to complete, the company may put you on garden leave for the remainder of your time.

This is better than being laid off because:

  • You will have more time to look for another job whilst still being paid
  • It will give you the chance to get your finances in order
  • You will still be entitled to COBRA (Continuation of Health Coverage) and other benefits until the end of your tenure

However, if you have been fired, your employer is not at liberty to give you any notice. This could leave you in a position where you might be financially insecure for a while.

This is a worst-case scenario and depends on the company, reasons for your dismissal and other circumstances. Some employers might provide a week’s notice.

If you sense the company is about to lay staff off, or you overhear discussions about the company and its financial status, it might be a good time to start planning for your future.

Many businesses make their plans quite clear and can provide their workforce with a warning before making any redundancies, it is good for employers to be transparent with their staff and give them as much warning as they can without inducing unnecessary fear.

Final Thoughts

You can never really plan for the unexpected; losing a job can be difficult both mentally and financially so making a job loss contingency plan could help you out in any eventuality. You can also take home some positives from the experience.

For instance:

  • It might make you re-think your whole career, maybe you need a career change or the position was not right for you.
  • Being laid off or fired can result in you finding your calling and give you the motivation to chase after your dream job.
  • You might even get motivated to make positive changes to your life, like starting your own business.

To summarise, if you find yourself in a position where you have been laid off or fired, make sure you do your homework to see if you are entitled to severance, notice, or if you think the situation is unfair.

Also, finally – take a deep breath, update your LinkedIn page and keep positive.